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Demand for Green Buildings: Office Tenants' Stated Willingness-to-Pay for Green Features

Author

Listed:
  • Spenser Robinson

    (Central Michigan University)

  • Robert Simons

    (Cleveland State University)

  • Eunkyu Lee

    (Cleveland State University)

  • Andrew Kern

    (Central Michigan University)

Abstract

This study analyzes the demand for green office building features among US office tenants. An on-line survey of a random sample of office tenants in 17 major US markets is employed, with 708 responses representing a 23% response rate. Tenants provided their perspective on green buildings and their stated willingness to pay for individual green features. Office tenants have the highest willingness to pay for improved indoor air quality and access to natural light. The results show that public firms, along with those in the Energy and Information Technology industries are most likely to pay for green-labeled buildings. Regional and demographic preferences are shown in both willingness to pay and attribute ranking. The findings provide implications for policy-makers and real estate property developers in terms of which green building features are considered to be most important for green building practices, and how demand for green features potentially differ across regions.

Suggested Citation

  • Spenser Robinson & Robert Simons & Eunkyu Lee & Andrew Kern, 2016. "Demand for Green Buildings: Office Tenants' Stated Willingness-to-Pay for Green Features," Journal of Real Estate Research, American Real Estate Society, vol. 38(3), pages 423-452.
    • Handle: RePEc:jre:issued:v:38:n:3:2016:p:423_452
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    Citations

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    Cited by:

    1. Steffen Westermann & Scott Niblock & Michael Kortt, 2018. "Corporate social responsibility and the performance of Australian REITs: a rolling regression approach," Journal of Asset Management, Palgrave Macmillan, vol. 19(4), pages 222-234, July.
    2. Steffen Westermann & Scott J. Niblock & Michael A. Kortt, 2018. "A Review of Corporate Social Responsibility and Real Estate Investment Trust Studies: An Australian Perspective," Economic Papers, The Economic Society of Australia, vol. 37(1), pages 92-110, March.
    3. Christensen, Pernille H. & Robinson, Spenser J. & Simons, Robert A., 2018. "The influence of energy considerations on decision making by institutional real estate owners in the U.S," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 275-284.
    4. Armin Jeddi Yeganeh & Andrew Patton McCoy & Steve Hankey, 2019. "Green Affordable Housing: Cost-Benefit Analysis for Zoning Incentives," Sustainability, MDPI, vol. 11(22), pages 1-24, November.
    5. Patrick Bergmann & Endre Kamarás & Werner Gleißner & Edeltraud Guenther, 2020. "Enhanced Cash Flow Valuation in Real Estate Management by Integrating Innovative Materials and Risk Assessment," Sustainability, MDPI, vol. 12(6), pages 1-26, March.
    6. Ming-Yi Huang, 2023. "Analyzing the effects of green building on housing prices: case study of Kaohsiung, Taiwan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1205-1235, February.
    7. Luming Shang & Sofia Dermisi & Youngjun Choe & Hyun Woo Lee & Yohan Min, 2023. "Assessing Office Building Marketability before and after the Implementation of Energy Benchmarking and Disclosure Policies—Lessons Learned from Major U.S. Cities," Sustainability, MDPI, vol. 15(11), pages 1-23, May.
    8. Constantin Kempf & Juerg Syz, 2022. "Why pay for sustainable housing? Decomposing the green premium of the residential property market in the Canton of Zurich, Switzerland," SN Business & Economics, Springer, vol. 2(11), pages 1-39, November.
    9. Junichiro Onishi & Yongheng Deng & Chihiro Shimizu, 2021. "Green Premium in the Tokyo Office Rent Market," Sustainability, MDPI, vol. 13(21), pages 1-17, November.
    10. Lin Zhang & Liwen Chen & Zezhou Wu & Hong Xue & Wenlin Dong, 2018. "Key Factors Affecting Informed Consumers’ Willingness to Pay for Green Housing: A Case Study of Jinan, China," Sustainability, MDPI, vol. 10(6), pages 1-16, May.
    11. Odilon Costa & Franz Fuerst & Spenser Robinson & Wesley Mendes-da-Silva, 2017. "Are Green Labels More Valuable in Emerging Real Estate Markets?," LARES lares_2017_paper_5, Latin American Real Estate Society (LARES).
    12. Liu, Pei & Lin, Borong & Zhou, Hao & Wu, Xiaoying & Little, John C., 2020. "CO2 emissions from urban buildings at the city scale: System dynamic projections and potential mitigation policies," Applied Energy, Elsevier, vol. 277(C).
    13. Niina Leskinen & Jussi Vimpari & Seppo Junnila, 2020. "A Review of the Impact of Green Building Certification on the Cash Flows and Values of Commercial Properties," Sustainability, MDPI, vol. 12(7), pages 1-22, March.
    14. Asuamah Yeboah, Samuel, 2024. "Navigating the Nexus: Overcoming Challenges in Public-Private Partnerships for Sustainable Building Initiatives in Developing Countries," MPRA Paper 122667, University Library of Munich, Germany, revised 05 Nov 2024.
    15. Bienert, Sven & Geiger, Peter & Spanner, Maximilian, . "Naturgefahren und Immobilienwerte in Deutschland : Studie," Beiträge zur Immobilienwirtschaft, University of Regensburg, Department of Economics, number 25, August.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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